Pedestrians walk past food stalls and shops in the Myeongdong shopping district in Seoul on March 26, 2024.
Anthony Wallace | AFP | Getty Images
South Korea's consumer inflation cooled more than expected in September and fell below the central bank's target for the first time since early 2021, amid growing expectations that policy will be eased soon.
Data released by Statistics Korea on Wednesday showed that the consumer price index increased by 1.6% year-on-year in September, following a 1.9% increase in August.
The increase was lower than the 1.9% median increase in a Reuters poll of economists and the weakest annual gain since February 2021.
The reading was below the Bank of Korea's medium-term target of 2%, and policymakers and market participants are increasingly talking about an upcoming rate cut at the next policy meeting on October 11.
At its last meeting in August, the Bank of Korea (BOK) interest rate Despite slowing inflation and domestic demand, interest rates hit a 16-year high of 3.50% as board members worried about financial stability risks posed by a hot housing market.
CPI rose 0.1% month-on-month, which was also lower than the 0.4% increase last month and the 0.3% expected by economists. Prices of petroleum products fell 4.1% and private services fell 0.4%, offsetting gains in agricultural products and utilities.
The core CPI, which excludes volatile food and energy items, increased by 2.0% year-on-year, which was lower than the 2.1% increase last month and the lowest level since November 2021.